Explain the internal context of strategy. Identify a firm’s resources and capabilities and explain their role in its performance. Define dynamic capabilities and explain their role in both strategic change and a firm’s performance. Explain how value‑chain activities are related to firm performance and competitive advantage. Explain the role of managers with respect to resources, capabilities, and value‑chain activities. | Chapter 3 Examining the Internal Environment: Resources, Capabilities, and Activities OBJECTIVES 1 2 3 4 5 Explain the internal context of strategy Identify a firm’s resources and capabilities and explain their role in its performance Define dynamic capabilities and explain their role in both strategic change and a firm’s performance Explain how value‑chain activities are related to firm performance and competitive advantage Explain the role of managers with respect to resources, capabilities, and value‑chain activities COMPARATIVE INDUSTRY REFORMANCE How do such differences in profitability materialize? ROA ROS Grocery Store Global Auto Semiconductor RESOURCES, CAPABILITIES, AND MANAGERIAL DECISIONS Strategy Competitive advantage/ disadvantage Management strategic decision making Capabilities Managers Resources Performance Full quote: “The creation of something new is not accomplished by the intellect but by the play of instinct acting from inner necessity. The creative . | Chapter 3 Examining the Internal Environment: Resources, Capabilities, and Activities OBJECTIVES 1 2 3 4 5 Explain the internal context of strategy Identify a firm’s resources and capabilities and explain their role in its performance Define dynamic capabilities and explain their role in both strategic change and a firm’s performance Explain how value‑chain activities are related to firm performance and competitive advantage Explain the role of managers with respect to resources, capabilities, and value‑chain activities COMPARATIVE INDUSTRY REFORMANCE How do such differences in profitability materialize? ROA ROS Grocery Store Global Auto Semiconductor RESOURCES, CAPABILITIES, AND MANAGERIAL DECISIONS Strategy Competitive advantage/ disadvantage Management strategic decision making Capabilities Managers Resources Performance Full quote: “The creation of something new is not accomplished by the intellect but by the play of instinct acting from inner necessity. The creative mind plays with the objects it loves.” - Carl Jung RESOURCES AND CAPABILITIES: FUNDAMENTAL BUILDING BLOCKS OF STRATEGY The inputs that firms use to create goods and services Undifferentiated or firms-specific Tangible or intangible Easy to acquire or difficult A firm’s skill in using its resources to create goods and services. The combination of procedures and expertise that the firm relies on to engage in distinct activities in the process of producing goods and services Capabilities (competencies) Resources Strategy Full quote: “The creation of something new is not accomplished by the intellect but by the play of instinct acting from inner necessity. The creative mind plays with the objects it loves.” - Carl Jung TRUST AS AN ORGANIZATIONAL RESOURCE Trust is an intangible resource 1 A trustworthy reputation for a firm can be leveraged. 2 KNOWLEDGE Knowledge as a resource Explicit (easy competitive intelligence) Tacit (more valuable) EXAMPLES OF CAPABILITIES 1: .
